Capio Capital Market Overview and Trade Ideas With a weak lead from Wall Street, the major Asian markets are trading in the red with exception to the Japanese market. The MSCI Asian pacific ex Japan is down -0.32%. The Yen’s weakness has lifted the Nikkei to 7 year highs, currently trading up +3%. The Australian central bank has kept interest rates unchanged at record lows. BHP Billiton and Rio Tinto are up +0.9%. The Chinese stocks rose led by China Railway Construction which won a Mexican contract valued at $4.3 billion and Great Wall Motors that reported a rise of +8% in sales. US stocks closed mixed on Monday, the Dow lost -0.14%, the Nasdaq gained +0.18% and the S&P500 was flat. After recording new highs on Friday, the S&P500 and Dow succumb to negative Chinese and European data. Energy stocks led the fall as they followed the oil price lower. In company news, Sapient surged +42% after being courted by French advertising group. American Reality Capital Properties tanked -12% after a probe by the FBI into accounting irregularities. Later on today, there will be midterm election which should shed some light on policy direction. The major European markets ended a 4-day winning streak and closed at the lows of the day dragged lower by negative data and corporate earnings, the Stoxx Europe closed down -0.76%. Chinese and Eurozone manufacturing PMI data missed expectations and added pressure to a fragile market. HSBC 3Q profits fell -12% due to provisions for pending investigation. EasyJet led the FTSE after demand increased as Irish low cost airline soared +10% after their first half results. Holcim fell -2.5% after releasing results. French telecom company, Altice made a final and binding offer for Portugal Telecom and the former fell -1.5% while the latter rose +6%. The market hugged the unchanged line throughout the day only to shoot higher as the US opened, the Top40 closed up +0.7%. On the economic front, vehicle sales for October showed a modest growth of +4.9% yoy, 2.5% lower than consensus. Manufacturing PMI showed a slight improvement to the previous reading and also beat expectations. AngloGold beat 3Q guidance and placed some mines for sale and rocketed +11.6%. Anglo Plat, African Rainbow minerals, Sasol and Exxaro were other resources that rallied over +2% to lift the index, Financials and industrials were relatively flat on the day. The value traded was R16.1 billion and the rand was hovering around 11.08 to the US dollar at the close. Trading Ideas 1) Long SHF from R56. Broke resistance at R56, we believe this stock will test resistance at R60 very soon.
Posted on: Tue, 04 Nov 2014 07:17:22 +0000
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